The nation’s largest used car retailer CarMax announced Tuesday it recorded a $120.7 million loss during its fourth quarter, marking a sharp reversal from the $89.9 million profit it earned during the same period last year.
The Richmond, Virginia-based company’s stock price tumbled 6.8% in early trading following the disappointing financial results.
CarMax’s quarterly performance was significantly impacted by a $141.3 million non-cash accounting charge related to goodwill impairment, which the company attributed to declining stock values and weaker projected financial results for fiscal 2026.
The used vehicle industry continues facing headwinds as dealers struggle to sell inventory at profitable margins amid declining consumer interest and the impact of import tariffs on the sector.
Profit margins on CarMax’s retail used vehicle sales decreased to $2,115 per car during the quarter, falling from $2,322 in the prior year period. The company’s wholesale profits per unit also declined from $1,045 to $940 as CarMax reduced prices to stimulate buyer interest.
New Chief Executive Keith Barr acknowledged the challenges, stating the company is operating “with urgency” to boost operational efficiency and restore sales growth.
External factors including ongoing Middle East tensions have contributed to consumer uncertainty, with gas prices hovering around $4 per gallon affecting spending patterns and driving increased interest in electric and hybrid alternatives.
Total quarterly revenue at CarMax dropped 1% year-over-year to $5.95 billion. The company’s per-share loss reached 85 cents, compared to earnings of 58 cents per share in the previous year’s fourth quarter.
When excluding one-time charges, CarMax posted adjusted earnings of 34 cents per share, down from 64 cents per share a year earlier.
